Correlation Between Light Wonder and Rank Group
Can any of the company-specific risk be diversified away by investing in both Light Wonder and Rank Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Light Wonder and Rank Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Light Wonder and The Rank Group, you can compare the effects of market volatilities on Light Wonder and Rank Group and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Light Wonder with a short position of Rank Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Light Wonder and Rank Group.
Diversification Opportunities for Light Wonder and Rank Group
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Light and Rank is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Light Wonder and The Rank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rank Group and Light Wonder is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Light Wonder are associated (or correlated) with Rank Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rank Group has no effect on the direction of Light Wonder i.e., Light Wonder and Rank Group go up and down completely randomly.
Pair Corralation between Light Wonder and Rank Group
Considering the 90-day investment horizon Light Wonder is expected to generate 0.77 times more return on investment than Rank Group. However, Light Wonder is 1.3 times less risky than Rank Group. It trades about 0.06 of its potential returns per unit of risk. The Rank Group is currently generating about 0.01 per unit of risk. If you would invest 6,123 in Light Wonder on September 3, 2024 and sell it today you would earn a total of 3,683 from holding Light Wonder or generate 60.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Light Wonder vs. The Rank Group
Performance |
| Timeline |
| Light Wonder |
| Rank Group |
Light Wonder and Rank Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Light Wonder and Rank Group
The main advantage of trading using opposite Light Wonder and Rank Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Light Wonder position performs unexpectedly, Rank Group can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Rank Group will offset losses from the drop in Rank Group's long position.| Light Wonder vs. Codere Online Corp | Light Wonder vs. Inspired Entertainment | Light Wonder vs. International Game Technology | Light Wonder vs. Accel Entertainment |
| Rank Group vs. Victorias Secret Co | Rank Group vs. Acco Brands | Rank Group vs. 51Talk Online Education | Rank Group vs. Shoe Carnival |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |